Analysts Are Updating Their TC Energy Corporation (TSE:TRP) Estimates After Its Third-Quarter Results
Shareholders might have noticed that TC Energy Corporation (TSE:TRP) filed its quarterly result this time last week. The early response was not positive, with shares down 5.3% to CA$52.44 in the past week. Results were roughly in line with estimates, with revenues of CA$3.2b and statutory earnings per share of CA$0.96. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for TC Energy
Taking into account the latest results, the most recent consensus for TC Energy from 15 analysts is for revenues of CA$13.9b in 2021 which, if met, would be a modest 7.9% increase on its sales over the past 12 months. Statutory earnings per share are forecast to decline 14% to CA$4.06 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$13.9b and earnings per share (EPS) of CA$4.07 in 2021. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at CA$70.43. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic TC Energy analyst has a price target of CA$80.00 per share, while the most pessimistic values it at CA$64.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting TC Energy is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It’s clear from the latest estimates that TC Energy’s rate of growth is expected to accelerate meaningfully, with the forecast 7.9% revenue growth noticeably faster than its historical growth of 4.0%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 8.1% per year. Factoring in the forecast acceleration in revenue, it’s pretty clear that TC Energy is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn’t be too quick to come to a conclusion on TC Energy. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple TC Energy analysts – going out to 2024, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for TC Energy (2 shouldn’t be ignored!) that we have uncovered.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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